-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 RgGSh2JL7v+mCBYe0WBhdkuBTr8TCDLi03PWhvMzwJy4qNBzpt6G24WJS4b81u3w
 oVy3Cro4I3C5NeMotjzrWA==

<SEC-DOCUMENT>0001297077-06-000096.txt : 20061215
<SEC-HEADER>0001297077-06-000096.hdr.sgml : 20061215
<ACCEPTANCE-DATETIME>20061215131018
ACCESSION NUMBER:		0001297077-06-000096
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20061031
FILED AS OF DATE:		20061215
DATE AS OF CHANGE:		20061215

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHAMPIONS SPORTS INC
		CENTRAL INDEX KEY:			0000771856
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING & DRINKING PLACES [5810]
		IRS NUMBER:				521401755
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-17263
		FILM NUMBER:		061279639

	BUSINESS ADDRESS:	
		STREET 1:		2500 WILSON BLVD
		STREET 2:		SUITE 305
		CITY:			ARLINGTON
		STATE:			VA
		ZIP:			22201
		BUSINESS PHONE:		703-526-04

	MAIL ADDRESS:	
		STREET 1:		1749 OLD MEADOW RD
		STREET 2:		STE 610
		CITY:			MCLEAN
		STATE:			VA
		ZIP:			22102

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	INTERNATIONAL GROUP INC
		DATE OF NAME CHANGE:	19860319
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>csports10qsb-103106.htm
<DESCRIPTION>10QSB 10/31/2006
<TEXT>
<html>
<head><meta content="text/html; charset=iso-8859-1">
<title>SECURITIES AND EXCHANGE COMMISSION</title>
</head>

<body >
<ul>
</ul>

<p>
<p align="center">
<b>SECURITIES AND EXCHANGE COMMISSION</b><br><b>Washington, D.C.
20549</b><p align="center">
<b>FORM 10-QSB</b></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="589.333186" colspan="1" rowspan="1" >
<p>
Mark One</p>
</td>
</tr>
</table></div>
<p>
</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="29.333326" colspan="1" rowspan="1" >
<p>
[X]</p>
</td>
<td width="485.333212" colspan="1" rowspan="1" >
<p>
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF</p>
</td>
</tr>
<tr valign="top">
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="485.333212" colspan="1" rowspan="1" >
<p>
THE SECURITIES EXCHANGE ACT OF 1934</p>
</td>
</tr>
</table></div>
<p>
<p align="center">
<u>For the quarterly period ended   October 31, 2006</u><p align="center">
OR</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="31.999992" colspan="1" rowspan="1" >
<p>
[&nbsp;&nbsp;&nbsp;]</p>
</td>
<td width="487.999878" colspan="1" rowspan="1" >
<p>
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF</p>
</td>
</tr>
<tr valign="top">
<td width="31.999992" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="487.999878" colspan="1" rowspan="1" >
<p>
THE SECURITIES EXCHANGE ACT OF 1934</p>
</td>
</tr>
</table></div>
<p>
<p align="center">
For the transition period from    <u>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;</u>&nbsp;to    <u>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><p align="center">
Commission file number        <u> &nbsp;0-17263</u><p align="center">
<u>CHAMPIONS SPORTS, INC.</u><br>(Exact name of registrant as specified in its
charter)</p align="center">
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="245.333272" colspan="1" rowspan="1" >
<p align="center">
<u>Delaware</u></p align="center">
</td>
<td width="250.666604" colspan="1" rowspan="1" >
<p align="center">
<u>52-1401755</u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="245.333272" colspan="1" rowspan="1" >
<p align="center">
(State or other jurisdiction of</p align="center">
</td>
<td width="250.666604" colspan="1" rowspan="1" >
<p align="center">
(I.R.S. Employer</p align="center">
</td>
</tr>
<tr valign="top">
<td width="245.333272" colspan="1" rowspan="1" >
<p align="center">
organization)</p align="center">
</td>
<td width="250.666604" colspan="1" rowspan="1" >
<p align="center">
Identification No.)</p align="center">
</td>
</tr>
</table></div>
<p>
<p align="center">
<u>2200 Wilson Blvd., Suite 102-316, Arlington VA 22201</u><br>(Address of
principal executive offices)<br>(Zip code)<p align="center">
<u>(703) 526-0400</u><br>(Registrant&#8217;s telephone number, including area
code)<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the
Registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.  Yes
<u>&nbsp;&nbsp;&nbsp;x&nbsp;&nbsp;&nbsp; </u>&nbsp;&nbsp;No
<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> <p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December 12, 2006 the Registrant
had a total of 17,824,658 shares of common stock outstanding.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, Inc.</b><br><b>FORM 10-QSB</b><p align="center">
<u>INDEX</u></p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
<u>Page</u></p>
</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
<p>
Part I. </p>
</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
Financial Information</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="619.999845" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
Item 1.&nbsp;&nbsp;&nbsp;Financial Statements</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="619.999845" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed Consolidated Balance Sheet
as of</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;October 31, 2006 (Unaudited)</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
5</p>
</td>
</tr>
<tr valign="top">
<td width="619.999845" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed Consolidated Statements of
Operations</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for the six months and three months
ended October 31, 2006 </p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;October 31, 2005 (Unaudited)</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
6</p>
</td>
</tr>
<tr valign="top">
<td width="619.999845" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Condensed Consolidated Statements of
Cash Flow for the</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;six months ended October 31, 2006 and
October 31, 2005 (Unaudited)</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
7</p>
</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes to Condensed Consolidated
Financial Statements (Unaudited)</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
8-17</p>
</td>
</tr>
<tr valign="top">
<td width="619.999845" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
Item 2.&nbsp;&nbsp;&nbsp;Management&#8217;s Discussions and Analysis</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
Financial Condition and Results of Operations</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
18-22</p>
</td>
</tr>
<tr valign="top">
<td width="619.999845" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
Item 4.&nbsp;&nbsp;&nbsp;Controls and Procedures</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
22</p>
</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
<p>
Part II.</p>
</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
Other Information and Signatures</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
Item 4.&nbsp;&nbsp;&nbsp;Submission of Matters to a Vote of Security Holders</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
23</p>
</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
Item 6.&nbsp;&nbsp;&nbsp;Exhibits and Reports on Form 8-K</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
23</p>
</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
<p>
Signatures</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
24</p>
</td>
</tr>
<tr valign="top">
<td width="53.333320" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="499.999875" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="554.666528" colspan="2" rowspan="1" >
<p>
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
25</p>
</td>
</tr>
<tr valign="top">
<td width="554.666528" colspan="2" rowspan="1" >
<p>
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
26</p>
</td>
</tr>
<tr valign="top">
<td width="554.666528" colspan="2" rowspan="1" >
<p>
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
<p>
27</p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>2</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS</b><br><b>OCTOBER 31, 2006 AND 2005
(UNAUDITED)</b></p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p align="center">
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>INDEX TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>OCTOBER 31, 2006 AND 2005
(UNAUDITED)</b></p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="635.999841" colspan="3" rowspan="1" >
&nbsp;</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p>
Page</p>
</td>
</tr>
<tr valign="top">
<td width="635.999841" colspan="3" rowspan="1" >
<p>
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:</p>
</td>
<td width="97.333309" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="733.333150" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="623.999844" colspan="2" rowspan="1" >
<p>
Condensed Consolidated Balance Sheet as of October 31, 2006 (Unaudited)</p>
</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;5</p>
</td>
</tr>
<tr valign="top">
<td width="733.333150" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="623.999844" colspan="2" rowspan="1" >
<p>
Condensed Consolidated Statements of Operations for the Six and Three Months
</p>
</td>
<td width="97.333309" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="598.666517" colspan="1" rowspan="1" >
<p>
Ended October 31, 2006 and 2005 (Unaudited)</p>
</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;6</p>
</td>
</tr>
<tr valign="top">
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="598.666517" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="97.333309" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="623.999844" colspan="2" rowspan="1" >
<p>
Condensed Consolidated Statements of Cash Flows for the Six Months Ended</p>
</td>
<td width="97.333309" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="11.999997" colspan="1" rowspan="1" >
<p>
</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p>
&nbsp;</p>
</td>
<td width="598.666517" colspan="1" rowspan="1" >
<p>
October 31, 2006 and 2005 (Unaudited)</p>
</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p>
&nbsp;&nbsp;7</p>
</td>
</tr>
<tr valign="top">
<td width="733.333150" colspan="4" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="623.999844" colspan="2" rowspan="1" >
<p>
Notes to Condensed Consolidated Financial Statements (Unaudited)</p>
</td>
<td width="97.333309" colspan="1" rowspan="1" >
<p>
8-17</p>
</td>
</tr>
</table></div>
<div align="center" color="#000080" style="position:relative; left: -5"><b></b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>
<p>
</p align="center">
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="625.333177" colspan="5" rowspan="1" >
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="625.333177" colspan="5" rowspan="1" >
<p align="center">
<font size="2"><b>CONDENSED CONSOLIDATED BALANCE
SHEET</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="625.333177" colspan="5" rowspan="1" >
<p align="center">
<font size="2"><b>OCTOBER 31, 2006 (UNAUDITED)</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="499.999875" colspan="3" rowspan="1" >
<p align="center">
<font size="2"><b>ASSETS</b></font></p align="center">
</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="2" rowspan="1" >
<p align="center">
<font size="2"><b>2006</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="499.999875" colspan="3" rowspan="1" >
<p>
<font size="2"><b>CURRENT ASSETS</b></font></p>
</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">Cash and cash equivalents</font></p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">352&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
<p>
<font size="2"><b>Total current assets</b></font></p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">352&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
<p>
<font size="2"><b>TOTAL ASSETS</b></font></p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2">352&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="499.999875" colspan="3" rowspan="1" >
<p align="center">
<font size="2"><b>LIABILITIES AND STOCKHOLDERS&#8217;
(DEFICIT)</b></font></p align="center">
</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="499.999875" colspan="3" rowspan="1" >
<p>
<font size="2"><b>CURRENT LIABILITIES</b></font></p>
</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">Accounts payable</font></p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right">
<font size="2">32,951&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">Other accrued expenses</font></p>
</td>
<td width="125.333302" colspan="2" rowspan="1" >
<p align="right">
<font size="2">287,342 &nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">Officer loans payable</font></p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">37,000&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
<p>
<font size="2"><b>Total current liabilities</b></font></p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">357,293&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="499.999875" colspan="3" rowspan="1" >
<p>
<font size="2"><b>COMMITMENTS AND CONTINGENCIES</b></font></p>
</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="499.999875" colspan="3" rowspan="1" >
<p>
<font size="2"><b>STOCKHOLDERS&#8217; (DEFICIT)</b></font></p>
</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">Preferred stock, $10 par value; 56,075 shares
authorized;</font></p>
</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;0 shares issued and outstanding</font></p>
</td>
<td width="125.333302" colspan="2" rowspan="1" >
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">Common stock, $.001 par value; 50,000,000 shares
authorized;</font></p>
</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;17,824,658 issued and outstanding</font></p>
</td>
<td width="125.333302" colspan="2" rowspan="1" >
<p align="right">
<font size="2">17,825&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">Additional paid-in capital</font></p>
</td>
<td width="125.333302" colspan="2" rowspan="1" >
<p align="right">
<font size="2">6,596,309&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">Accumulated deficit</font></p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(6,971,075)</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="474.666548" colspan="2" rowspan="1" >
<p>
<font size="2">Total stockholders&#8217; (deficit)</font></p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">(356,941)</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="26.666660" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="446.666555" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="125.333302" colspan="2" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="499.999875" colspan="3" rowspan="1" >
<p>
<font size="2"><b>TOTAL LIABILITIES AND STOCKHOLDERS&#8217;
(DEFICIT)</b></font></p>
</td>
<td width="34.666658" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="90.666644" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2">352&nbsp;</font></p>
</td>
</tr>
</table></div>
<p>
<p align="center">
The accompanying notes are an integral part of these condensed consolidated
financial statements.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>5</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p align="center">
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="833.333125" colspan="14" rowspan="1" >
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="833.333125" colspan="14" rowspan="1" >
<p align="center">
<font size="2"><b>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="833.333125" colspan="14" rowspan="1" >
<p align="center">
<font size="2"><b>FOR THE SIX AND THREE MONTHS ENDED OCTOBER 31, 2006 AND 2005
(UNAUDITED)</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="186.666620" colspan="3" rowspan="1" >
<p align="center">
<font size="2"><b>Six Months Ended October 31, </b></font></p align="center">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="185.333287" colspan="3" rowspan="1" >
<p align="center">
<font size="2"><b>Three Months Ended October 31,</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="center">
<font size="2"><b><u>2006</u></b></font></p align="center">
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="center">
<font size="2"><b><u>2005</u></b></font></p align="center">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2"><b><u>2006</u></b></font></p align="center">
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="center">
<font size="2"><b><u>2005</u></b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="205.333282" colspan="3" rowspan="1" >
<p>
<font size="2"><b>OPERATING REVENUE</b></font></p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales</font></p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$ </font></p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td width="205.333282" colspan="3" rowspan="1" >
<p>
<font size="2"><b>Total operating revenue</b></font></p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="341.333248" colspan="5" rowspan="1" >
<p>
<font size="2"><b>COSTS AND OPERATING EXPENSES </b></font></p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="205.333282" colspan="3" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and
administrative</font></p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">36,888&nbsp;</font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">113,846&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">19,568&nbsp;</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">43,847&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="273.333265" colspan="4" rowspan="1" >
<p>
<font size="2"><b>Total costs and operating expenses</b></font></p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">36,888&nbsp;</font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">113,846&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">19,568&nbsp;</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">43,847&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="273.333265" colspan="4" rowspan="1" >
<p>
<font size="2"><b>LOSS BEFORE OTHER (EXPENSE)</b></font></p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (36,888)</font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (113,846)</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (19,568)</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (43,847)</font></p>
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="273.333265" colspan="4" rowspan="1" >
<p>
<font size="2"><b>DISCONTINUED OPERATIONS</b></font></p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="341.333248" colspan="5" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from discontinued
operations (net of taxes)</font></p>
</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> (22,583)</font></p align="right">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right">
<font size="2">748&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="205.333282" colspan="3" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of
assets</font></p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (142,520)</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="205.333282" colspan="3" rowspan="1" >
<p>
<font size="2"><b>Total discontinued operations</b></font></p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (165,103)</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">748&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="430.666559" colspan="7" rowspan="1" >
<p>
<font size="2"><b>NET (LOSS) BEFORE PROVISION FOR INCOME TAXES</b></font></p>
</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> (36,888)</font></p align="right">
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> (278,949)</font></p align="right">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> (19,568)</font></p align="right">
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> (43,099)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="205.333282" colspan="3" rowspan="1" >
<p>
<font size="2">    Provision for income taxes</font></p>
</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-   </font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="6" rowspan="1" >
<p>
<font size="2"><b>NET LOSS APPLICABLE TO COMMON STOCKHOLDERS</b></font></p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2"> (36,888)</font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2"> (278,949)</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2"> (19,568)</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2"> (43,099)</font></p>
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="407.999898" colspan="6" rowspan="1" >
<p>
<font size="2"><b>BASIC AND DILUTED LOSS PER COMMON SHARE</b></font></p>
</td>
<td width="22.666661" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (0.00)</font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (0.02)</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (0.00)</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (0.00)</font></p>
</td>
</tr>
<tr valign="top">
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="67.999983" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="65.333317" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="22.666661" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="66.666650" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="430.666559" colspan="7" rowspan="1" >
<p>
<font size="2"><b>WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING </b></font></p>
</td>
<td width="66.666650" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">16,906,180&nbsp;</font></p>
</td>
<td width="39.999990" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="78.666647" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">16,824,658&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">16,987,701&nbsp;</font></p>
</td>
<td width="41.333323" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">16,824,658&nbsp;</font></p>
</td>
</tr>
</table></div>
<p align="center">
<p align="center">
The accompanying notes are an integral part of these condensed consolidated
financial statements.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>6</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p align="center">
</p align="center">
<div align="center" style="position:relative; left: -1"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="741.333148" colspan="5" rowspan="1" >
<p align="center">
<font size="2"><b>CHAMPIONS SPORTS, INC. AND
SUBSIDIARIES</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="741.333148" colspan="5" rowspan="1" >
<p align="center">
<font size="2"><b>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="741.333148" colspan="5" rowspan="1" >
<p align="center">
<font size="2"><b>FOR THE SIX MONTHS ENDED OCTOBER 31, 2006 AND 2005
(UNAUDITED)</b></font></p align="center">
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>2006</b></font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="2"><b>2005</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>CASH FLOW FROM OPERATING ACTIVITIES</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>Continuing Operations:</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">   Net loss</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (36,888)</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (113,846)</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>   Adjustments to reconcile net loss to net cash
</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(used in) operating
activities:</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>Adjustments to reconcile net income (loss) to net change
</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in operating
activities:</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts
payable</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> (300)</font></p align="right">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">17,405 &nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other accrued
expenses</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">39,939&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
adjustments</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (300)</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">57,344&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in)
operating activities - operations</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (37,188)</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (56,502)</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>Discontinued Operations:</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">   Loss from discontinued operations</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (165,103)</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>   Adjustments to reconcile net loss to net cash
</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provided by
operating activities:</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of
assets</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">142,520&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>  Changes in assets and liabilities</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">18,459&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deposits</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">11,052&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
adjustments</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">172,031&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by
operating activities - discontinued operations</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">6,928&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in)
operating activities - </b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;continuing and
discontinued operations</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (37,188)</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2"> (49,574)</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>CASH FLOWS FROM INVESTING ACTIVITIES</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>Continuing Operations:</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">    Proceeds from officer loans payable</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
<font size="2">37,000&nbsp;</font></p align="right">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>Discontinued Operations:</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">    Proceeds from sale of assets</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
<font size="2">-&nbsp;</font></p align="right">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">10,000&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">&nbsp;&nbsp;&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">&nbsp;&nbsp;&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by
investing activities</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">37,000&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">10,000&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>NET INCREASE (DECREASE) IN</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>    CASH AND CASH EQUIVALENTS</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> (188)</font></p align="right">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2"> (39,574)</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>CASH AND CASH EQUIVALENTS -</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>    BEGINNING OF PERIOD</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
<font size="2">540&nbsp;</font></p align="right">
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right">
<font size="2">84,513&nbsp;</font></p align="right">
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>CASH AND CASH EQUIVALENTS - END OF PERIOD</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2">352&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2">44,939&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid during the
period for:</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
paid</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income Tax
Paid</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2"><b>NON CASH INVESTING AND FINANCING ACTIVITIES</b></font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock issued for
exchange of preferred stock and dividends </font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
<p>
<font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;payable on preferred
stock.</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2">674,790&nbsp;</font></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
<p align="right">
<font size="2">$</font></p align="right">
</td>
<td width="95.999976" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="2">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="489.333211" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p align="center">
<p align="center">
The accompanying notes are an integral part of these condensed consolidated
financial statements.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>7</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>OCTOBER 31, 2006 AND 2005
(UNAUDITED)</b><p>
<b>NOTE 1-    &nbsp;<u>ORGANIZATION AND BASIS OF PRESENTATION</u></b></p>
<p style="margin-left:80">Champions Sports, Inc., (the &#8220;Company&#8221;) a
Delaware corporation, promoted a sport theme restaurant bar concept through
Company owned and licensed operations. The Company sold the rights to the
Champions brand to Marriott International, Inc. (Marriott) and became a licensee
of Champions Sports Bar Restaurants. Substantially all memorabilia sales are to
Marriott. On June 23, 2005, the Company ceased operations for its&#8217; only
sports bar located in San Antonio, Texas.  Fixed assets with a net book value of
$152,520 were sold for $10,000 and inventory consisting of primarily restaurant
food and beverage was sold for $3,200.</p><p>
</p>
<p style="margin-left:80">The condensed consolidated unaudited interim financial
statements included herein have been prepared, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. The condensed
consolidated financial statements and notes are presented as permitted on Form
10-QSB and do not contain information included in the Company&#8217;s annual
consolidated statements and notes. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. The results for the six months ended October 31, 2006
may not be indicative of the results for the entire year.<br><br>These
statements reflect all adjustments, consisting of normal recurring adjustments,
which in the opinion of management, are necessary for fair presentation of the
information contained herein.</p><p>
</p>
<p style="margin-left:80">The Company has reclassified its financial statements
to take effect for the disposal of its only operating business.</p><p>
<p>
<b>NOTE 2-    &nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</u></b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Principles
of Consolidation</u></b></p>
<p style="margin-left:80">The condensed consolidated financial statements
include the accounts of the Company and its subsidiaries.  All material
intercompany transactions have been eliminated in consolidation. </p><p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>8</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>(CONTINUED)</b><br><b>OCTOBER 31,
2006 AND 2005 (UNAUDITED)</b><p>
<b>NOTE 2-    &nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
</u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Property
and Equipment</u></b></p>
<p style="margin-left:80">Property and equipment are stated at cost.
Depreciation and amortization is computed from the date property is placed in
service using the straight-line method over estimated useful lives as
follows:<br></p><div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="195.999951" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="190.666619" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3">Life</font></p>
</td>
</tr>
<tr valign="top">
<td width="195.999951" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="190.666619" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="195.999951" colspan="1" rowspan="1" >
<p>
Furniture and equipment</p>
</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="190.666619" colspan="1" rowspan="1" >
<p align="center">
5-15 years</p align="center">
</td>
</tr>
<tr valign="top">
<td width="195.999951" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="190.666619" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="195.999951" colspan="1" rowspan="1" >
<p>
Leasehold improvements</p>
</td>
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="190.666619" colspan="1" rowspan="1" >
<p align="center">
Remaining term of the lease</p align="center">
</td>
</tr>
</table></div>
<p>
</p>
<p style="margin-left:80">Depreciation and amortization expense was $0 for the
six months ended October 31, 2006 and 2005, respectively. </p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Use
of Estimates</u></b></p>
<p style="margin-left:80">The preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period.  Actual
results could differ from those estimates. </p><p>
<p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Net
(Loss) Per Share</u></b></p>
<p style="margin-left:80">Historical net (loss) per common share is computed
using the weighted average number of common shares outstanding. Diluted earnings
per share (EPS) includes additional dilution from common stock equivalents, such
as stock issuable pursuant to the exercise of stock options and warrants. Common
stock equivalents were not included in the computation of diluted earnings per
share when the Company reported a loss because to do so would be antidilutive
for periods presented. </p><p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>9</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>(CONTINUED) </b><br><b>OCTOBER 31,
2006 AND 2005 (UNAUDITED)</b><p>
<b>NOTE 2-    &nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
</u>(CONTINUED)</b><p>
<b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Net
(Loss) Per Share</u> (Continued)</b></p>
<p style="margin-left:80">The following is a reconciliation of the computation
for basic and diluted EPS for the six months ended October 31:</p><p>
</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<b>October 31,</b></p align="center">
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center">
<b>October 31,</b></p align="center">
</td>
</tr>
<tr valign="top">
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2006</b></font></p>
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="center" style="border-bottom:solid windowtext .5pt">
<font size="3"><b>2005</b></font></p>
</td>
</tr>
<tr valign="top">
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="71.999982" colspan="1" rowspan="1" >
<p>
Net loss</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (36,888)</font></p>
</td>
<td width="21.333328" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3"> (278,949)</font></p>
</td>
</tr>
<tr valign="top">
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="215.999946" colspan="3" rowspan="1" >
<p>
Weighted-average common shares</p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="2" rowspan="1" >
<p>
Outstanding (Basic)</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
16,906,180&nbsp;</p align="right">
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
16,824,658&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="215.999946" colspan="3" rowspan="1" >
<p>
Weighted-average common stock</p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="2" rowspan="1" >
<p>
Equivalents</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="2" rowspan="1" >
<p>
&nbsp;Stock options</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
- -&nbsp;</p align="right">
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right">
- -&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="2" rowspan="1" >
<p>
&nbsp;Warrants</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="215.999946" colspan="3" rowspan="1" >
<p>
Weighted-average common shares</p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="143.999964" colspan="2" rowspan="1" >
<p>
Outstanding (Diluted)</p>
</td>
<td width="71.999982" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="43.999989" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,906,180&nbsp;</font></p>
</td>
<td width="21.333328" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="101.333308" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,824,658&nbsp;</font></p>
</td>
</tr>
</table></div>
<p>
</p>
<p style="margin-left:80">Options and warrants outstanding to purchase stock
were not included in the computation of diluted EPS for October 31, 2006 and
2005 because inclusion would have been antidilutive.  </p><p>
</p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Cash
and Cash Equivalents</u></b></p>
<p style="margin-left:80">For purposes of the condensed consolidated statements
of cash flow, the Company considers all highly liquid debt instruments purchased
with a maturity of six months or less, unless restricted as to use, to be cash
equivalents.
</p>&nbsp;	<div align="center" color="#000080" style="position:relative; left: -5"><b>10</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div>&nbsp;	<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>(CONTINUED) </b><br><b>OCTOBER 31,
2006 AND 2005 (UNAUDITED)</b><p>
<b>NOTE 2-    &nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
</u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Income
Taxes</u></b></p>
<p style="margin-left:80">The Company has adopted the provisions of Statement of
Financial Accounting Standards No. 109 (the Statement), Accounting for Income
Taxes. The Statement requires an asset and liability approach for financial
accounting and reporting for income taxes, and the recognition of deferred tax
assets and liabilities for the temporary differences between the financial
reporting bases and tax bases of the Company&#8217;s assets and liabilities at
enacted tax rates expected to be in effect when such amounts are realized or
settled.</p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Fair
Value of Financial Instruments</u></b></p>
<p style="margin-left:80">The carrying amounts of the Company&#8217;s financial
instruments, including cash and cash equivalents, accounts payable, and accrued
expenses, officer loans payable approximate fair values because of the short
maturities of these instruments.</p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Options
for Common Stock</u></b></p>
<p style="margin-left:80">The Company uses the intrinsic value method to account
for options granted to executive officers, directors and other key employees for
the purchase of common stock. No compensation expense is recognized on the grant
date, since at that date, the option price equals or is higher than the market
price of the underlying common stock. The Company discloses the pro forma effect
of accounting for stock options under the fair value method. The Company uses
the fair value method to account for options granted to advisors for the
purchase of common stock. </p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Stock-Based
Compensation</u></b></p>
<p style="margin-left:80">Employee stock awards under the Company&#8217;s
compensation plans are accounted for in accordance with Accounting Principles
Board Opinion No. 25 (&#8220;APB 25&#8221;), &#8220;Accounting for Stock Issued
to Employees&#8221;, and related interpretations. The Company provides the
disclosure requirements of Statement of Financial Accounting Standards No. 123,
&#8220;Accounting for Stock-Based Compensation&#8221; (&#8220;SFAS 123&#8221;),
and related interpretations. Stock-based awards to non-employees are accounted
for under the provisions of SFAS 123 and has adopted the enhanced disclosure
provisions of SFAS No. 148 &#8220;Accounting for Stock-Based Compensation-
Transition and Disclosure, an amendment of SFAS No. 123&#8221;.</p><p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>11</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>(CONTINUED) </b><br><b>OCTOBER 31,
2006 AND 2005 (UNAUDITED)</b><p>
<b>NOTE 2-    &nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
</u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Stock-Based
Compensation</u> (Continued)</b></p>
<p style="margin-left:80">The Company measures compensation expense for its
employee stock-based compensation using the intrinsic-value method. Under the
intrinsic-value method of accounting for stock-based compensation, when the
exercise price of options granted to employees is less than the estimated fair
value of the underlying stock on the date of grant, deferred compensation is
recognized and is amortized to compensation expense over the applicable vesting
period. In each of the periods presented, the vesting period was the period in
which the options were granted. </p><p>
</p>
<p style="margin-left:80">The Company measures compensation expense for its
non-employee stock-based compensation under the Financial Accounting Standards
Board (FASB) Emerging Issues Task Force (EITF) Issue No. 96-18,
&#8220;Accounting for Equity Instruments that are Issued to Other Than Employees
for Acquiring, or in Conjunction with Selling, Goods or Services&#8221;. The
fair value of the option issued is used to measure the transaction, as this is
more reliable than the fair value of the services received. The fair value is
measured at the value of the Company&#8217;s common stock on the date that the
commitment for performance by the counterparty has been reached or the
counterparty&#8217;s performance is complete. The fair value of the equity
instrument is charged directly to compensation expense and additional paid-in
capital.</p><p>
<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Recent
Accounting Pronouncements</u></b></p>
<p style="margin-left:80">On December 16, 2004, the Financial Accounting
Standards Board ("FASB") published Statement of Financial Accounting Standards
No. 123 (Revised 2004), Share-Based Payment ("SFAS 123R").  SFAS 123R requires
that compensation cost related to share-based payment transactions be recognized
in the financial statements.  Share-based payment transactions within the scope
of SFAS 123R include stock options, restricted stock plans, performance-based
awards, stock appreciation rights, and employee share purchase plans.  The
provisions of SFAS 123R are effective for small business issuers as of the first
interim period that begins after December 15, 2005.  Accordingly, the Company
implemented the revised standard in the fourth quarter of fiscal year 2005.
</p><p>
</p>
<p style="margin-left:80">The Adoption of SFAS 123R has not had any effect on
the financial Statement of the company.</p><p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>12</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>(CONTINUED) </b><br><b>OCTOBER 31,
2006 AND 2005 (UNAUDITED)</b><p>
<b>NOTE 2-    &nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
</u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Recent
Accounting Pronouncements</u> (Continued)</b></p>
<p style="margin-left:80">On December 16, 2004, FASB issued Financial Accounting
Standards No. 153, Exchanges of Non-monetary Assets, an amendment of APB Opinion
No. 29, Accounting for Non-monetary Transactions ("SFAS 153"). This statement
amends APB Opinion 29 to eliminate the exception for non-monetary exchanges of
similar productive assets and replaces it with a general exception for exchanges
of non-monetary assets that do not have commercial substance. Under SFAS 153, if
a non-monetary exchange of similar productive assets meets a
commercial-substance criterion and fair value is determinable, the transaction
must be accounted for at fair value resulting in recognition of any gain or
loss. SFAS 153 is effective for non-monetary transactions in fiscal periods that
begin after June 15, 2005.  The implementation of this standard did not have a
material impact on its financial position, results of operations or cash
flows.</p><p>
</p>
<p style="margin-left:80">In May&nbsp;2005, the FASB issued SFAS No.&nbsp;154,
&#8220;Accounting Changes and Error Corrections.&#8221; SFAS No.&nbsp;154
replaces Accounting Principles Board (&#8220;APB&#8221;) Opinion No.&nbsp;20,
&#8220;Accounting Changes&#8221; and SFAS No.&nbsp;3, &#8220;Reporting
Accounting Changes in Interim Financial Statements.&#8221; SFAS No.&nbsp;154
requires retrospective application to prior periods&#8217; financial statements
of a voluntary change in accounting principle unless it is impracticable. APB
No.&nbsp;20 previously required that most voluntary changes in accounting
principle be recognized by including the cumulative effect of changing to the
new accounting principle in net income in the period of the change. SFAS
No.&nbsp;154 is effective for accounting changes and corrections of errors made
in fiscal years beginning after December&nbsp;15, 2005. The adoption of SFAS
No.&nbsp;154 did not have a material impact on the Company&#8217;s financial
position, results of operations, or cash flows.</p><p>
</p>
<p style="margin-left:80">In February&nbsp;2006, the FASB issued SFAS
No.&nbsp;155, &#8220;Accounting for Certain Hybrid Financial Instruments, an
amendment of FASB Statements No.&nbsp;133 and 140.&#8221; SFAS No.&nbsp;155
resolves issues addressed in SFAS No.&nbsp;133 Implementation Issue No.&nbsp;D1,
&#8220;Application of Statement 133 to Beneficial Interests in Securitized
Financial Assets,&#8221; and permits fair value remeasurement for any hybrid
financial instrument that contains an embedded derivative that otherwise would
require bifurcation, clarifies which interest-only strips and principal-only
strips are not subject to the requirements of SFAS No.&nbsp;133, establishes a
requirement to evaluate interests in securitized financial assets to identify
interests that are freestanding derivatives or that are hybrid financial
instruments that contain an embedded derivative requiring bifurcation, clarifies
that concentrations of credit risk in the form of subordination are not embedded
derivatives and amends SFAS No.&nbsp;140 to eliminate the prohibition on a
qualifying special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial interest other than another derivative financial
instrument. SFAS No.&nbsp;155 is effective for all financial instruments
acquired or issued after the beginning of the first fiscal year that begins
after September&nbsp;15, 2006. The adoption of FAS 155 is not anticipated to
have a material impact on the Company&#8217;s financial position, results of
operations, or cash
flows.</p><div align="center" color="#000080" style="position:relative; left: -5"><b>13</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>(CONTINUED) </b><br><b>OCTOBER 31,
2006 AND 2005 (UNAUDITED)</b><p>
<b>NOTE 2-    &nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
</u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Recent
Accounting Pronouncements</u> (Continued)</b></p>
<p style="margin-left:80">In March&nbsp;2006, the FASB issued SFAS No.&nbsp;156,
&#8220;Accounting for Servicing of Financial Assets, an amendment of FASB
Statement No.&nbsp;140.&#8221; SFAS No.&nbsp;156 requires an entity to recognize
a servicing asset or liability each time it undertakes an obligation to service
a financial asset by entering into a servicing contract under a transfer of the
servicer&#8217;s financial assets that meets the requirements for sale
accounting, a transfer of the servicer&#8217;s financial assets to a qualified
special-purpose entity in a guaranteed mortgage securitization in which the
transferor retains all of the resulting securities and classifies them as either
available-for-sale or trading securities in accordance with SFAS No.&nbsp;115,
&#8220;Accounting for Certain Investments in Debt and Equity Securities&#8221;
and an acquisition or assumption of an obligation to service a financial asset
that does not relate to financial assets of the servicer or its consolidated
affiliates. Additionally, SFAS No.&nbsp;156 requires all separately recognized
servicing assets and servicing liabilities to be initially measured at fair
value, permits an entity to choose either the use of an amortization or fair
value method for subsequent measurements, permits at initial adoption a one-time
reclassification of available-for-sale securities to trading securities by
entities with recognized servicing rights and requires separate presentation of
servicing assets and liabilities subsequently measured at fair value and
additional disclosures for all separately recognized servicing assets and
liabilities. SFAS No.&nbsp;156 is effective for transactions entered into after
the beginning of the first fiscal year that begins after September&nbsp;15,
2006.  The adoption of SFAS 156 is not anticipated to have a material impact on
the Company&#8217;s financial position or results of operations.</p><p>
</p>
<p style="margin-left:80">In September 2006, The Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No.
157, "Fair Value Measurement" ("SFAS No. 157"). This standard provides guidance
for using fair value to measure assets and liabilities. SFAS No. 157 applies
whenever other standards require (or permit) assets or liabilities to be
measured at fair value but does not expand the use of fair value in any new
circumstances. Prior to SFAS No. 157, the methods for measuring fair value were
diverse and inconsistent, especially for items that are not actively traded. The
standard clarifies that for items that are not actively traded, such as certain
kinds of derivatives, fair value should reflect the price in a transaction with
a market participant, including an adjustment for risk, not just the
company&#8217;s mark-to-model value. SFAS No. 157 also requires expanded
disclosure of the effect on earnings for items measured using unobservable data.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The Company is currently evaluating the impact of this statement on its
financial statements and expects to adopt SFAS No.157 on December 31,
2007.</p><p>
</p>
<p style="margin-left:80">In September 2006, the FASB issued SFAS No. 158,
"Employers&#8217; Accounting for Defined Benefit Pension and Other
Postretirement &nbsp;&nbsp;Plans -- An Amendment of FASB Statements No. 87, 88,
106, and 132R." This standard requires an employer to: (a) recognize in its
statement of financial position an asset for a plan&#8217;s overfunded status or
a liability for a plan&#8217;s underfunded status; (b) measure a plan&#8217;s
assets and its obligations that determine its funded status as of the end of the
employer&#8217;s fiscal year (with limited exceptions); and (c) recognize
changes in the funded status of a defined benefit postretirement plan in the
year in which the changes occur. Those changes will be reported in comprehensive
income. The requirement to recognize the funded status of a benefit plan and the
disclosure requirements are effective as of the end of the fiscal year ending
after December 15, 2006. The requirement to measure plan assets and benefit
obligations as of the date of the employer&#8217;s fiscal year-end statement of
financial position is effective for fiscal years ending after December 15, 2008.
The Company is evaluating the impact of this statement on its financial
statements and does not believe that it will have a material impact on the
company&#8217;s financial position or results of operations.</p><p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>14</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>(CONTINUED) </b><br><b>OCTOBER 31,
2006 AND 2005 (UNAUDITED)</b><p>
<b>NOTE 2-    &nbsp;<u>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
</u>(CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Reclassifications</u></b></p>
<p style="margin-left:80">The loss from discontinued operations for the six
months ended October 31, 2005 was reclassified to reflect the sale of the
Company&#8217;s only operating business activity in the condensed consolidated
statements of operations in accordance with the provisions of SFAS 144. The
reclassification had no effect on net loss for the six-month period ended
October 31, 2005. The reclassifications had no effect on net loss for the six
months ended October 31, 2006. </p><p>
<p>
<b>NOTE 3-    &nbsp;<u>COMMITMENTS AND CONTINGENCIES</u></b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Operating
leases</u></b></p>
<p style="margin-left:80">The Company lease, as tenant, restaurant space under
an operating lease, which expired June 30, 2005 and was not renewed. The lease
escalated for increases in the landlord&#8217;s expenses for increases in the
Consumer Price Index, and required additional rentals based on a percentage of
restaurant sales over a defined amount. The lease granted the Company certain
concessions, which were amortized to lease expense over the term of the
lease.</p><p>
</p>
<p style="margin-left:80">Rental expense during the six months ended October 31,
2006 and 2005 was $210 and $43,132, respectively.</p><p>
<p>
<b>NOTE 4-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>MARRIOTT LICENSE</u></b></p>
<p style="margin-left:80">The Company was an exclusive supplier of sports
memorabilia and a consultant to all new Champions Sports Bars located in
Marriott and Renaissance Hotels worldwide. This agreement was terminated by
Marriott effective May 28, 2005. </p><p>
<p>
<b>NOTE 5-    &nbsp;<u>OTHER ACCRUED EXPENSES</u></b></p>
<p style="margin-left:80">This account represents accrued officer&#8217;s
payroll and related payroll taxes. </p><p>
<p>
<b>NOTE 6-    &nbsp;<u>OFFICER LOANS PAYABLE</u></b></p>
<p style="margin-left:80">For the six months ended October 2006, the Company
received working capital advances from an officer of the Company which are due
on demand without interest. </p><p>
<p>
<b>NOTE 7-    &nbsp;<u>STOCKHOLDERS&#8217; DEFICIT</u> </b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Common
Stock</u> </b></p>
<p style="margin-left:80">The Company has 50,000,000 shares authorized and
17,824,658 shares issued and outstanding at October 31, 2006.</p><p>
</p>
<p style="margin-left:80">In October 2006, the Company issued 1,000,000 shares
of common stock, a five-year warrant to purchase up to 500,000 shares of common
stock at an exercise price of $.15 per share, and a five-year warrant to
purchase up to 500,000 shares of common stock at an exercise price of $.25 per
share to the holder of 32,450 shares of the Registrant&#8217;s preferred stock,
representing all of the outstanding shares of preferred stock, in exchange for
the cancellation of such shares and the waiver of all accrued and unpaid
dividends on such shares, which totaled $350,460. These securities were issued
in reliance upon the exemption from registration provided by Sections 3(a)(9) of
the Securities Act. </p><p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>15</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>(CONTINUED) </b><br><b>OCTOBER 31,
2006 AND 2005 (UNAUDITED)</b><p>
<b>NOTE 7-    &nbsp;<u>STOCKHOLDERS&#8217; DEFICIT</u> (CONTINUED)</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<b><u>Preferred
Stock </u></b></p>
<p style="margin-left:80">The Company has 56,075 shares of preferred stock
authorized and 0 shares issued and outstanding at October 31, 2006. </p><p>
</p>
<p style="margin-left:80">There were no issuances of preferred stock during the
six months ended October 31, 2006. The 32,450 shares as of July&nbsp;31, 2006
were cancelled in October 2006. </p><p>
<p>
<b>NOTE 8-    &nbsp;<u>GOING CONCERN</u> </b></p>
<p style="margin-left:80">As shown in the accompanying condensed consolidated
financial statements, the Company has sustained net operating losses for the
years ended April 30, 2006 and 2005 and for the six months ended October 31,
2006 and has sustained large accumulated deficits that raise substantial doubt
about its ability to continue as a going concern. In addition, the Company is in
search of acquiring a business, or finding a suitable merger candidate. </p><p>
</p>
<p style="margin-left:80">Management has restructured the Company and is
continuing to search for a more profitable company to acquire. </p><p>
</p>
<p style="margin-left:80">The Company&#8217;s future success is dependent upon
its ability to achieve profitable operations and generate cash from operating
activities, and upon additional financing. There is no guarantee that the
Company will be able to raise enough capital or generate revenues to sustain its
operations. The condensed consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.</p><p>
<p>
<b>NOTE 9-&nbsp;&nbsp;&nbsp;<u>PROVISION FOR INCOME TAXES</u></b></p>
<p style="margin-left:80">Deferred income taxes will be determined using the
liability method for the temporary differences between the financial reporting
basis and income tax basis of the Company&#8217;s assets and liabilities.
Deferred income taxes will be measured based on the tax rates expected to be in
effect when the temporary differences are included in the Company&#8217;s
consolidated tax return. Deferred tax assets and liabilities are recognized
based on anticipated future tax consequences attributable to differences between
financial statement carrying amounts of assets and liabilities and their
respective tax bases.</p><p>
</p>
<p style="margin-left:80">At October 31, 2006 and 2005, deferred tax assets
consist of the following:     </p><p>
</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="9.333331" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="291.999927" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center">
<u>2006</u></p align="center">
</td>
<td width="107.999973" colspan="2" rowspan="1" >
<p align="center">
<u>2005</u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="301.333258" colspan="2" rowspan="1" >
<p>
Deferred tax asset            </p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right">
2,439,876&nbsp;</p align="right">
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right">
2,418,296&nbsp;</p align="right">
</td>
</tr>
<tr valign="top">
<td width="313.333255" colspan="3" rowspan="1" >
<p>
Less:  valuation allowance</p>
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(2,439,876)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:solid windowtext .5pt">
<font size="3">(2,418,296)</font></p>
</td>
</tr>
<tr valign="top">
<td width="301.333258" colspan="2" rowspan="1" >
<p>
Net deferred tax asset</p>
</td>
<td width="11.999997" colspan="1" rowspan="1" >
&nbsp;$	</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">-0-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$ </p align="right">
</td>
<td width="83.999979" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">-0-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="506.666540" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>16</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CHAMPIONS SPORTS, INC. AND SUBSIDIARIES</b><br><b>NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS</b><br><b>(CONTINUED) </b><br><b>OCTOBER 31,
2006 AND 2005 (UNAUDITED)</b><p>
<b>NOTE 9-&nbsp;&nbsp;&nbsp;<u>PROVISION FOR INCOME TAXES
</u>(CONTINUED)</b></p>
<p style="margin-left:80">At October 31, 2006 and 2005, the Company had federal
net operating loss carryforwards in the approximate amounts of $6,971,075 and
$6,909,418 available to offset future taxable income. The Company established
valuation allowances equal to the full amount of the deferred tax assets due to
the uncertainty of the utilization of the operating losses in future
periods.</p><p>
<p>
<b>NOTE 10-&nbsp;&nbsp;&nbsp;<u>DISPOSAL OF BUSINESS</u></b></p>
<p style="margin-left:80">On June 23, 2005, the Company ceased operations for
its&#8217; only sports bar located in San Antonio, Texas.  Fixed assets with a
net book value of $152,520 were sold for $10,000 and inventory consisting of
primarily restaurant food and beverage was sold for $3,200.  The Company&#8217;s
condensed consolidated financial statements have been reclassified to reflect
this sale as discontinued operations, for all periods presented. Summarized
operating results of discontinued operations are as follows:</p><p>
</p>
<div align="center" style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="251.999937" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center">
October 31,</p align="center">
</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center">
October 31,</p align="center">
</td>
</tr>
<tr valign="top">
<td width="251.999937" colspan="2" rowspan="1" >
&nbsp;</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center">
<u>2006</u></p align="center">
</td>
<td width="95.999976" colspan="2" rowspan="1" >
<p align="center">
<u>2005</u></p align="center">
</td>
</tr>
<tr valign="top">
<td width="443.999889" colspan="6" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="227.999943" colspan="1" rowspan="1" >
<p>
Revenues</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">0&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">0&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="227.999943" colspan="1" rowspan="1" >
<p>
Net loss before income taxes  </p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">0&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (165,103)</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="227.999943" colspan="1" rowspan="1" >
<p>
Provision for taxes</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">-&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">-&nbsp;</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="227.999943" colspan="1" rowspan="1" >
<p>
Net loss</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">0&nbsp;</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (165,103)</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="227.999943" colspan="1" rowspan="1" >
<p>
Net loss per share</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.00)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.01)</font></p>
</td>
</tr>
<tr valign="top">
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="227.999943" colspan="1" rowspan="1" >
<p>
Diluted loss per share</p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3"> (0.00)</font></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
<p align="right">
$</p align="right">
</td>
<td width="71.999982" colspan="1" rowspan="1" >
<p align="right" style="border-bottom:double">
<font size="3">(0.00)</font></p>
</td>
</tr>
</table></div>
&nbsp;	<div align="center" color="#000080" style="position:relative; left: -5"><b>17</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
Item 2.&nbsp;&nbsp;&nbsp;Managements Discussion and Analysis of Financial
Condition and Results of Operations.<p>
There is substantial doubt about the Company&#8217;s ability to continue as a
going concern. The Company&#8217;s independent auditor, for the year ending
April&nbsp;30, 2006, has expressed substantial doubt that the Company can
continue as a going concern due to recurring losses and working capital shortage
and that there is no guarantee that the Company will be able to raise enough
capital or generate revenues to sustain its operations. The Company is
continuing to face severe liquidity and cash problems as of date of the filing
of this 10-QSB and has been meeting its working capital needs by receiving
advances from its executive officer, James Martell, from June&nbsp;2006 through
October&nbsp;2006. The Company can give no assurance that these advances can
continue.  It is the intention of the Company to continue operations until such
time as Champions finds a new business opportunity, merges with another company
or raises additional financing, although there is no assurance that this can be
done on terms satisfactory to the Company. The Company is pursuing various
business opportunities in order to continue operations. If the Company&#8217;s
liquidity situation does not improve, the Company might have to discontinue its
business as a going concern. <p>
The Company ceased its restaurant operations at San Antonio Champions location
on June 23, 2005. The lease on that location expired on June&nbsp;30, 2005 and
the Company vacated the premise on that date. The Company&#8217;s condensed
consolidated financial statements have been reclassified to reflect this
cessation of business as discontinued operations for the comparative six months
period ending October&nbsp;31, 2005.<p>
Through October&nbsp;31, 2006 and currently, the business plan for the Company
is to actively pursue opportunities to initiate new ventures on its own and also
to pursue opportunities whereby the Company will primarily serve as a vehicle
for the acquisition of a target business that the Company believes will have
significant growth potential. The Company intends to use its  capital  stock,
to  effect a new  business or a business combination  with a private company
that desires to establish a public  trading  market for its  securities while
avoiding  what it may deem to be adverse  consequences  of  undertaking a public
offering itself, such as time delays, significant expense, loss of voting
control and other burdens including significant  professional fees. The business
combination may be with a financially stable, mature company or a company that
is financially unstable or in its early stages of development or growth.<p>
In seeking to attain this business objective, the Company will not restrict its
search to any particular industry.  Rather,  the Company  may  investigate
businesses  of  essentially  any kind or nature and  participate  in any type of
business  that may, in  management&#8217;s  opinion,  meet the business
objectives as described in this document.  The Company emphasizes that the
description in this document of its business objectives is extremely general and
is not meant to restrict the discretion of management to search for and enter
into potential business opportunities.<p>
The  Company  has not chosen the  particular  business in which the Company will
engage in and has not  conducted  any market  studies  with  respect to any
business  or industry to  evaluate  the  possible  merits or risks of the target
business or the particular industry in which the Company may ultimately operate.
To the extent  that the  Company  may enter into a business  combination  with a
financially  unstable  company or an entity in its early stage of development or
growth, including entities without established records of sales or earnings, The
Company  will become  subject to numerous  risks  inherent in the  business  and
operations of financially  unstable and early stage or potential emerging growth
companies.  </p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>18</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
In addition, to the extent that the Company may enter a business combination
with an entity in an industry characterized by a high level of risk, the Company
will become subject to the currently unascertainable risks of that industry.  An
extremely high level of risk frequently characterizes certain industries that
experience rapid growth. In addition,  although the Company will endeavor  to
evaluate  the risks  inherent  in a  particular  industry or target business,
the Company  cannot give  assurance  that the Company  will  properly ascertain
or assess all significant risk factors.<p>
The Company  anticipates that target business candidates will be brought to its
attention from various  unaffiliated  sources,  including but not restricted to,
investment bankers, venture capitalists, securities broker-dealers,  bankers and
other  members of the  financial  community,  who may present  solicited  or
unsolicited proposals. Company&#8217;s officers and directors and their
affiliates may also bring to the Company&#8217;s attention target business
candidates.  While the Company does not  presently  anticipate  engaging  the
services of  professional firms that  specialize  in  business  acquisitions  on
any formal or basis,  the Company may engage such firms in the future, in which
event, the Company may pay a finder&#8217;s fee or other  compensation  for such
introductions if they result in consummated  transactions.  These fees are
customarily between 1% and 5% of the size of the overall transaction, based upon
a sliding scale of the amount involved.<p>
The Company&#8217;s management will have significant flexibility in identifying
and selecting a prospective target business.  In evaluating a prospective target
business, the management will consider, among other factors, the following:<p>
- - financial condition and results of operation of the target;<p>
- - growth  potential of the target and that of the industry in which the target
operates;<p>
- - experience and skill of the target&#8217;s  management and  availability of
additional personnel; o the capital requirements of the target;<p>
- - competitive  position of the target;<p>
- - stage of development that the target&#8217;s products,  processes or services
are at;<p>
- - degree of current or  potential  market  acceptance  of the  target&#8217;s
products,  processes or services;<p>
- - proprietary features and the degree of intellectual property or other
protection of the target&#8217;s products, processes or services;<p>
- - regulatory environment of the industry in which the target operates;<p>
- - prospective equity interest in, and opportunity for control of, the target;
and<p>
- - costs associated with effecting the business combination.<p>
These criteria are not intended to be exhaustive.  Any evaluation relating to
the merits of a particular business combination will be based, to the extent
relevant, on the above factors as well as other considerations deemed relevant
by management in connection with effecting a business combination consistent
with Company&#8217;s business objective.<p>
In connection with Company&#8217;s  evaluation of a prospective  target
business, the Company  anticipates  that it will  conduct due  diligence  review
that will encompass, among other things, meetings with incumbent management and
inspection of facilities,  as well as a review of financial or other
information that will be made available to the Company.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>19</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
The Company will endeavor to structure a business combination so as to achieve
the most favorable tax treatment to the Company, the target business and both of
the companies&#8217; stockholders.  There can be no assurance, however, that the
Internal Revenue Service or appropriate state tax authority will agree with the
tax treatment of the business combination.<p>
Until the Company is presented with a specific opportunity for a business
combination, the Company is unable to ascertain with any degree of certainty the
time and costs required to select and evaluate a target business and to
structure and complete the business combination.   Any costs incurred in
connection with the identification and evaluation of a prospective target
business with which a business combination is not ultimately completed will
result in a loss to the Company and will reduce the amount of capital otherwise
available to complete a business combination.<p>
Although the Company intends to carefully scrutinize the management of a
prospective target business before effecting a business combination, the Company
cannot give assurance that its assessment of the target&#8217;s management will
prove to be correct, especially in light of the possible inexperience of
Company&#8217;s management in evaluating certain types of businesses.  In
addition, the Company cannot give assurance that the target&#8217;s future
management will have the necessary skills, qualifications or abilities to manage
a public company intending to embark on a program of business development.
Furthermore, the future role of Company&#8217;s officers and directors, if any,
in the target business cannot presently be stated with any certainty.  It is
possible that one or more of the Company&#8217;s officers and directors will
remain associated in some capacity with the Company following a business
combination and will devote their efforts to the affairs of the new business
combination.  Moreover, the Company cannot give assurance that its officers and
directors will have significant experience or knowledge relating to the
operations of the particular target business.<p>
The Company may seek to recruit additional managers to supplement the incumbent
management of the target business. The Company,  however,  cannot give assurance
that it will be able to  recruit  additional  managers  who  have the requisite
skills,  knowledge or  experience  necessary to enhance the incumbent
management.<p>
The Company expects to encounter intense competition from other entities having
a similar business objective. Many of these entities, including financial
consulting companies and venture capital firms, have longer operating histories
and have   extensive   experience in   identifying   and effecting   business
combinations, directly or through affiliates. Many of these competitors possess
significantly greater financial, technical and other resources.  The Company
cannot give assurance that it will be able to effectively compete with these
entities.  In the event the Company is unable to compete effectively with these
entities, the Company may be forced to evaluate less attractive prospects for a
business combination. If the Company is forced to evaluate these less attractive
prospects, the Company cannot give assurance that the stated business objectives
will be met.<p>
<u>Results of Operation</u><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended October 31,
2006, the Company&#8217;s net loss was $36,888 and the net loss for the three
months ended October 31, 2006 was $19,568.  The Company&#8217;s total assets for
the six months ended October 31, 2006 were $352. For the six months ended
October 31, 2005, the Company&#8217;s net loss was $278,949 and the net loss for
the three months ended October 31, 2005 was $43,099. The Company&#8217;s total
assets for the six months ended October 31, 2005 were $44,939.<p>
<p>
<u>Revenues</u><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s total operating
revenues were $0.00 for the six months ended October 31, 2006 and $0.00 for the
three-month period ended October 31, 2006.  The Company ceased operations at San
Antonio Champions restaurant location on June 23, 2005 after the lease on that
location expired. The Company&#8217;s condensed consolidated financial
statements have been reclassified to reflect this cessation of business as
discontinued operations for the comparative six months period ending October 31,
2005.<p>
<u> Expenses</u><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses
were $36,888 for the six months ended October 31, 2006 and $19,568 for the three
months ended October 31, 2006 compared to $113,846 for the six months ended
October 31, 2005 and $43,847 for the three months ended October 31, 2005, which
reflected the expenses of discontinuing the Champions restaurant operations in
2005. </p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>20</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
<u>Liquidity and Capital Resources</u><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s cash position as
of October 31, 2006 was $352 compared to $540 on April 30, 2006. For the six
month period, the Company&#8217;s continuing operations used $37,188 in cash.
The Company met its liquidity needs by receiving advances from its executive
officer, James Martell. <p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s working capital
was a negative $356,941 on October 31, 2006 and a negative $670,513 on April 30,
2006, This reduction was due to the conversion of a current liability of
$350,460 of dividend payment on preferred stock that was converted to 1,000,000
shares of common stock, a five-year warrant to purchase up to 500,000 shares of
common stock at an exercise price of $.15 per share, and a five-year warrant to
purchase up to 500,000 shares of common stock at an exercise price of $.25 per
share. The Company&#8217;s working capital is very unfavorable when compared to
other public companies.<p>
<u>Other   </u><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October 16, 2006, the Registrant
agreed to issue 1,000,000 shares of common stock, a five-year warrant to
purchase up to 500,000 shares of common stock at an exercise price of $.15 per
share, and a five-year warrant to purchase up to 500,000 shares of common stock
at an exercise price of $.25 per share to the holder of 32,450 shares of the
Registrant&#8217;s preferred stock, representing all of the outstanding shares
of preferred stock, in exchange for the cancellation of such shares and the
waiver of all accrued and unpaid dividends on such shares, which totaled
$350,460.  These securities were issued in reliance upon the exemption from
registration provided by Sections 3(a)(9) of the Securities Act.<p>
Risk factors<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The risks and uncertainties described
below are not the only ones facing the Company.  Additional risks not presently
known or that the Company currently considers being insignificant may also
impair the Company&#8217;s business operations in the future.  The
Company&#8217;s business, financial condition and plan of operations could be
materially adversely affected by any of the following risks.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is continuing to incur
losses through October 31, 2006 and there is substantial doubt about the
Company&#8217;s ability to continue as a going concern, which means that the
Company may not be able to continue operations unless it obtains additional
funding, finds a new business opportunity or merges with or is acquired by
another company.   The Company is actively   pursuing merger or acquisition
candidates and other financing possibilities to meet its liquidity needs.  There
is no assurance that the Company will be able to structure a merger or
acquisition, or raise additional financing to continue operations on terms
satisfactory to the Company.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The loss of the services of the
Company&#8217;s  key employee,  James Martell,  the  Company&#8217;s  Chairman,
President  and  CEO,  may  have a material adverse affect on the Company&#8217;s
business, financial condition and its ability to find a new business
opportunity, obtain  additional  funding or structuring a merger or
acquisition.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company may, in the future, issue
additional shares of the Company&#8217;s common stock, which would reduce
shareholders&#8217; percent of ownership and may dilute their share value. The
Company&#8217;s Articles of Incorporation authorize the issuance of 50,000,000
shares of common stock, par value $.001 per share. As of December 12, 2006 the
Company had 17,824,658 shares of common stock issued and outstanding.  The
future issuance of all or part of the remaining authorized common stock may
result in substantial dilution in the percentage of the common stock held by the
Company&#8217;s then existing shareholders.  The Company may value any common
stock issued in the future on an arbitrary basis. The issuance of common stock
for future services or acquisitions or other corporate actions may have the
effect of diluting the value of the shares held by the shareholders, and might
have an adverse effect on any trading market for the Company&#8217;s common
stock.<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s common stock may
be affected by sporadic or limited trading volume and may fluctuate
significantly.  Although the Company&#8217;s  common stock has continually  been
trading  publicly  since 1985,  at times  actively,  it can be currently
considered  to be trading on a sporadic or limited  basis on the OTC  Bulletin
Board in comparison to the NASDAQ National Market, the American Stock Exchange,
New York Stock  Exchange and other national  securities  exchanges and there can
be no assurance that an active trading market for the common stock  will
develop.  As a result,  this could  adversely  affect the shareholders&#8217;
ability  to sell  their  common  stock  in  short  time periods, or possibly at
all. Therefore, the Company cannot assure that there will be liquidity in the
common stock.  The common stock has experienced, and is likely to experience in
the future, significant price and volume fluctuations, which could adversely
affect the market price of the common stock without regard to the
Company&#8217;s operating performance.  In addition, the Company believes that
factors such as quarterly fluctuations in the Company&#8217;s financial results
and changes in the overall economy or the condition of the financial markets
could cause the price of the common stock to fluctuate
substantially.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>21</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#8217;s common stock is
deemed to be "penny stock," which may make it more difficult for shareholders to
resell their shares due to suitability requirements.  The common stock is a
penny stock. Penny stocks generally are equity securities with a price of less
than $5.00 per  share  other  than  securities  registered  on  certain
national securities  exchanges or quoted on the NASDAQ Stock  Market,  provided
that current price and volume information with respect to transactions in  such
securities  is  provided  by the  exchange  or  system.  The Company&#8217;s
securities may be subject to "penny stock rules" that impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established  customers and accredited investors  (generally  those
with  assets in excess of  $1,000,000  or annual  income  exceeding  $200,000
or $300,000  together  with their spouse).  For transactions covered by these
rules, the broker-dealer must make a special suitability determination for the
purchase of such securities and have received the purchaser&#8217;s written
consent to the transaction prior to the purchase.  Additionally,  for any
transaction involving  a penny  stock,  unless  exempt,  the "penny  stock
rules" require  the  delivery,  prior  to the  transaction,  of a  disclosure
schedule  prescribed  by the  Commission  relating  to the penny stock market.
The broker-dealer  also must disclose the commissions  payable to both  the
broker-dealer  and  the  registered  representative  and current  quotations for
the securities.  Finally, monthly statements must be sent disclosing recent
price information on the limited market in penny stocks.  Consequently,  the
"penny stock rules" may restrict the ability of  broker-dealers  to sell
Company&#8217;s  securities and may have the  effect of  reducing  the level of
trading  activity  of the common stock in the secondary  market.  The foregoing
required penny stock restrictions will not apply to securities if such
securities maintain a market price of $5.00 or greater.  The Company can give no
assurance that the price of its securities will reach or maintain such a
level.<p align="center">
<b>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This document contains
"forward-looking statements" (within the meaning of the Private Securities
Litigation Act of 1995) that inherently involve risk and uncertainties.  The
Company generally uses words such as "believe," "may," "could," "will,"
"intend,"  "expect,"  "anticipate,"  "plan," and similar expressions to identify
forward-looking statements.  One should not place undue reliance on these
forward-looking statements.  The Company&#8217;s actual results could differ
materially from those anticipated in the forward-looking statements for many
unforeseen factors, which may include, but are not limited to, changes in
general economic conditions, the ongoing threat of terrorism, ability to have
access to financing sources on reasonable terms and other risks that are
described in this document. Although the Company believes the expectations
reflected in the forward-looking statements are reasonable, they relate only to
events as of the date on which the statements are made, and the Company&#8217;s
future results, levels of activity, performance or achievements may not meet
these expectations.  The Company does not intend to update any of the
forward-looking statements after the date of this document to conform these
statements to actual results or to changes in the Company&#8217;s expectations,
except as required by law.<p>
Item 4.&nbsp;&nbsp;&nbsp;Controls and Procedures<p>
The Company maintains a set of disclosure controls and procedures designed to
ensure that information required to be disclosed by the Company in the reports
filed under the Securities Exchange Act, is recorded, processed, summarized and
reported within the time periods specified by the SEC&#8217;s rules and forms.
Disclosure controls are also designed with the objective of ensuring that this
information is accumulated and communicated to the Company&#8217;s management,
including the Company&#8217;s chief executive officer and chief financial
officer, as appropriate, to allow timely decisions regarding required
disclosure.<p>
Based upon their evaluation as of the end of the period covered by this report,
the Company&#8217;s chief executive officer concluded that, the Company&#8217;s
disclosure controls and procedures are not effective to ensure that information
required to be included in the Company&#8217;s periodic SEC filings is recorded,
processed, summarized, and reported within the time periods specified in the SEC
rules and forms.<p>
The Company&#8217;s Board of Directors was advised by Bagell, Josephs, Levine
&amp; Company, L.L.C., the Company&#8217;s independent registered public
accounting firm, that during their performance of audit procedures for FY 2006,
Bagell, Josephs, Levine &amp; Company, L.L.C. identified a material weakness as
defined in Public Company Accounting Oversight Board Standard No. 2 in the
Company&#8217;s internal control over financial reporting.</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>22</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p>
This deficiency consisted primarily of inadequate staffing and supervision that
could lead to the untimely identification and resolution of accounting and
disclosure matters and failure to perform timely and effective reviews. However,
the size of the Company prevents it from being able to employ sufficient
resources to enable the Company to have adequate segregation of duties within
its internal control system. Management is required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.<p>
Certifications  of the Chief Executive Officer and Chief Financial Officer
regarding,  among other items,  disclosure  controls and procedures are included
immediately after the signature section of this Form 10-QSB.<p>
<b>Part II.&nbsp;&nbsp;&nbsp;Other Information</b><p>
<b>Item 4.&nbsp;&nbsp;&nbsp;Submission of Matters to A Vote of Security
Holders</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None<p>
<b>Item 6.&nbsp;&nbsp;&nbsp;Exhibits and Reports on Form 8-K</b><p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October 20, 2006, the Company filed
a Form 8-K regarding the issuance on October 16, 2006, of 1,000,000 shares of
common stock, a five-year warrant to purchase up to 500,000 shares of common
stock at an exercise price of $.15 per share, and a five-year warrant to
purchase up to 500,000 shares of common stock at an exercise price of $.25 per
share to the holder of 32,450 shares of the Registrant&#8217;s preferred stock,
representing all of the outstanding shares of preferred stock, in exchange for
the cancellation of such shares and the waiver of all accrued and unpaid
dividends on such shares, which totaled $350,460.  These securities were issued
in reliance upon the exemption from registration provided by Sections 3(a)(9) of
the Securities Act. </p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>23</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
SIGNATURES<p>
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.</p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="377.333239" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="251.999937" colspan="1" rowspan="1" >
<p>
<b>CHAMPIONS Sports, Inc.</b></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="659.999835" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="659.999835" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="377.333239" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="251.999937" colspan="1" rowspan="1" >
<p>
<u>/s/ James Martell</u></p>
</td>
<td width="29.333326" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="377.333239" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="2" rowspan="1" >
<p>
James Martell</p>
</td>
</tr>
<tr valign="top">
<td width="377.333239" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="281.333263" colspan="2" rowspan="1" >
<p>
Chairman, President , CEO and CFO</p>
</td>
</tr>
<tr valign="top">
<td width="659.999835" colspan="3" rowspan="1" >
<p>
Date: December 12, 2006</p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>24</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
CERTIFICATION OF CHIEF EXECUTIVE OFFICER<p align="center">
Section 302 Certification<p>
I, JAMES MARTELL, certify that:<p>
(1) I have reviewed this quarterly report on Form 10Q-SB of CHAMPIONS SPORTS,
INC., a Delaware corporation (the "registrant");<p>
(2) Based on my  knowledge,  this  quarterly  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;<p>
(3) Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;<p>
(4) The  registrant&#8217;s  other  certifying  officers  and I are  responsible
for establishing and maintaining  disclosure  controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls
and procedures to ensure that material information relating to the registrant,
including its consolidated  subsidiaries, is made known to us by others within
those entities, particularly during the period in which this quarterly report is
being   prepared;<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Evaluated the
effectiveness of the registrant&#8217;s disclosure controls and  procedures  as
of a date  within 90 days prior to the  filing  date of this  quarterly report
(the "Evaluation Date"); and<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
Presented  in  this  quarterly   report  our  conclusions   about  the
effectiveness  of the  disclosure  controls  and  procedures  based  on our
evaluation as of the Evaluation Date;<p>
(5) The registrant&#8217;s  other certifying  officers and I have disclosed,
based on our most recent evaluation, to the registrant&#8217;s auditors and the
audit committee of the  registrant&#8217;s  board of directors (or persons
performing  the equivalent functions):<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all  significant  deficiencies  in
the design or  operation of internal controls which could adversely affect the
registrant&#8217;s ability to record,  process,  summarize and report  financial
data and have  identified for the registrant&#8217;s auditors any material
weaknesses in internal controls;
and<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any fraud,  whether or not
material,  that involves management or other employees who have a significant
role  in  the  registrant&#8217;s  internal controls; and<p>
(6) The registrant&#8217;s  other  certifying  officers and I have  indicated in
this quarterly report whether there were significant  changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.<p>
Date:  December 12, 2006</p align="right">
<div style="position:relative; left: 35"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="443.999889" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="143.999964" colspan="1" rowspan="1" >
<p>
<u>/s/ James Martell</u></p>
</td>
<td width="23.999994" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="443.999889" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="167.999958" colspan="2" rowspan="1" >
<p>
James Martell</p>
</td>
</tr>
<tr valign="top">
<td width="443.999889" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="167.999958" colspan="2" rowspan="1" >
<p>
Chief Executive Officer</p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>25</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
CERTIFICATION OF CHIEF FINANCIAL OFFICER<p align="center">
Section 302 Certification<p>
I, James Martell, certify that:<p>
(1) I have reviewed this quarterly report on Form 10Q-SB of CHAMPIONS SPORTS,
INC., a Delaware corporation (the "registrant");<p>
(2) Based on my knowledge, this  quarterly  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report.<p>
(3) Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report; <p>
(4) The  registrant&#8217;s  other  certifying  officers  and I are  responsible
for establishing and maintaining  disclosure  controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed  such  disclosure
controls  and  procedures  to ensure  that  material information relating to the
registrant, including its consolidated subsidiaries, is  made  known  to  us by
others  within  those  entities, particularly  during  the period in which  this
quarterly  report is being
prepared;<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Evaluated the
effectiveness of the registrant&#8217;s disclosure controls and procedures  as
of a date  within 90 days prior to the  filing  date of this quarterly report
(the "Evaluation Date"); and<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
Presented  in  this  quarterly   report  our  conclusions   about  the
effectiveness  of the  disclosure  controls  and  procedures  based  on our
evaluation as of the Evaluation Date;<p>
(5) The registrant&#8217;s  other certifying  officers and I have disclosed,
based on our most recent evaluation, to the registrant&#8217;s auditors and the
audit committee of the  registrant&#8217;s  board of directors (or persons
performing  the equivalent functions):<p>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all  significant  deficiencies  in
the design or  operation of internal controls which could adversely affect the
registrant&#8217;s  ability to record, process,  summarize and report  financial
data and have  identified for the registrant&#8217;s auditors any material
weaknesses in internal controls;
and<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any fraud,  whether or not
material,  that involves management or other employees who have a significant
role  in  the  registrant&#8217;s  internal controls; and<p>
(6) The  registrant&#8217;s other  certifying  officers and I have  indicated in
this quarterly report whether there were significant  changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.<p>
Date:  December 12, 2006</p align="right">
<div style="position:relative; left: 35"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="431.999892" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="167.999958" colspan="1" rowspan="1" >
<p>
<u>/s/ James Martell</u></p>
</td>
<td width="35.999991" colspan="1" rowspan="1" >
&nbsp;</td>
</tr>
<tr valign="top">
<td width="431.999892" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="203.999949" colspan="2" rowspan="1" >
<p>
James Martell</p>
</td>
</tr>
<tr valign="top">
<td width="431.999892" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="203.999949" colspan="2" rowspan="1" >
<p>
Chief Financial Officer</p>
</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>26</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
<p align="center">
<b>CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT
TO</b><br><b>SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002</b><p>
In connection with the quarterly report of Champions Sports, Inc. (the
"Company") on Form 10-QSB for the six months ended October 31, 2006 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
each of the undersigned, in the capacities and on the dates indicated below,
hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that to their knowledge:<p>
1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Report fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and <p>
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information contained in the Report fairly
presents, in all material respects, the financial condition and results of
operation of the Company. </p>
<div style="position:relative; left: 0"><table border=0 cellpadding=0 cellspacing =0 >
<tr valign="top">
<td width="341.333248" colspan="1" rowspan="1" >
<p>
Dated December 12, 2006</p>
</td>
<td width="77.333314" colspan="1" rowspan="1" >
<p align="right">
By:&nbsp;</p align="right">
</td>
<td width="287.999928" colspan="1" rowspan="1" >
<p>
<u>/s/ James Martell</u></p>
</td>
</tr>
<tr valign="top">
<td width="341.333248" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="287.999928" colspan="1" rowspan="1" >
<p>
James M. Martell, Chief Executive Officer and</p>
</td>
</tr>
<tr valign="top">
<td width="341.333248" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="77.333314" colspan="1" rowspan="1" >
&nbsp;</td>
<td width="287.999928" colspan="1" rowspan="1" >
<p>
Chief Financial Officer</p>
</td>
</tr>
<tr valign="top">
<td width="707.999823" colspan="3" rowspan="1" >
&nbsp;</td>
</tr>
</table></div>
<p>
</p align="center">
<div align="center" color="#000080" style="position:relative; left: -5"><b>27</b><hr size="3" color="#999999" STYLE="page-break-after: always"> &nbsp; </div><p>
</p>


</body>

</html>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
